Polkadot proposes to establish a Strategic Reserve Fund using Bitcoin worth 2 million USD

A new proposal in the Polkadot ecosystem is calling for the establishment of a Strategic Reserve Fund using Bitcoin, aimed at diversifying the treasury's assets and enhancing DeFi capabilities.

According to the proposal, the plan will start by converting 500,000 DOT ( equivalent to about 2 million USD ) into Threshold Bitcoin ( tBTC ) — a wrapped version of Bitcoin ( wrapped ) and secured through threshold cryptography (, ensuring decentralization and non-custodial.

Details of the Bitcoin Reserve Plan

Before switching to Bitcoin, this amount of DOT will be staked through aDOT, a yield-generating asset token, to help the Polkadot treasury earn additional income from idle assets while also increasing liquidity to meet borrowing needs in DeFi.

In addition, 1,000 DOT will be set aside to cover the transaction fees incurred during the implementation of the strategy.

After this step, the treasury will gradually convert DOT to tBTC over the course of a year, through the )rolling DCA( alternating DCA function of the Hydration platform. This method allows for regular daily purchases of Bitcoin, helping to spread price risk and maintain a stable accumulation flow.

Once enough tBTC has been accumulated, each small portion of )0.005 tBTC per transaction( will be added as liquidity to the Hydration Omnipool. The proposal states:

"This is the first step in the strategy of diversifying assets into Bitcoin. In the future, other proposals may expand to other forms of BTC collateral assets. This tBTC is still controlled by the treasury and is held as a reserve, not for payment."

Proponents of the plan argue that the addition of Bitcoin will help reduce dependence on DOT and market volatility, and open up new DeFi opportunities in the Polkadot ecosystem. This reserve fund is also intended to maintain the purchasing power of the treasury and ensure future budgets.

The move by Polkadot reflects a broader trend in the industry as more organizations and governments view Bitcoin as a strategic reserve asset to hedge against economic risks and currency inflation.

According to data from Hodl15Capital, the top 100 companies hold over 818,000 BTC in their portfolios.

DOT continues to weaken

The Bitcoin reserve plan was proposed in the context of the DOT token price facing many difficulties. According to data from Bitcoin Magazine, the DOT price has decreased by 7% in the past 24 hours, currently at 3.80 USD, the lowest level since October 2023.

Measured in Bitcoin, DOT has dropped to a record low of 0.00003658 BTC, equivalent to a decline of over 62% in the past year.

Thach Sanh